Where the Next Big Five of Tech Could Come From

The Big Five — Alphabet (Google’s parent company), Amazon, Apple, Facebook, and Microsoft — have a combined market capitalization of $3 trillion. Their hold on the wallets and imaginations of consumers appears to be unshakeable, if not constantly expanding. And they have the financial heft to squash or purchase any potential competitor.

While it’s true that these five giants hold an incredible amount of power and influence, it’s also true that this sort of business dominance doesn’t preclude a new player or players from joining their rarefied space, perhaps even knocking one, several, or even all off their perch in the process. This will likely be a result of not just a single product or service advancement but of a revolutionary innovation that fundamentally affects society at large, just as the current Big Five have.

Recently, Jeff Bezos apparently told his employees that one day Amazon might fail and be displaced. Interestingly, this message was delivered at a time when the venerated General Electric would experience what was once unimaginable. Only two decades ago, GE held the mantle of the world’s most valuable company. Now it has lost almost 90% of its peak market value and after 132 years was removed as the longest-tenured member of the Dow Jones Industrial Index.

Technology’s biggest companies are not immune to such a fate. IBM, once the hegemonic king of all computer technology, saw its market dominance evaporate as younger, hungrier upstarts seized on a computing revolution for which IBM was unready. The company survives today thanks to a canny reinvention, holding only a tiny fraction of the power and influence it once had. Likewise, Nokia proudly owned 50% of the mobile phone market just over a decade ago. Its products were near-ubiquitous at a time when owning a cell phone went from a curiosity to a necessity. But in recent years, its mobile division was sold to Microsoft and eventually written off entirely by CEO Satya Nadella.

The inevitable turnover

Generally, the most valued companies are those profitably satisfying massive consumer demand. When a new major player emerges, it will likely address a shifting demand, introduce a disruptive technology, or some combination of both. Apple gained its global dominance by pioneering the first personal PCs (and did so again years later by creating an improved smartphone), Facebook by mainstreaming the concept of social media, and Amazon by giving consumers a more efficient way to shop.

Companies are often displaced when their management fails to adapt rapidly enough to changing consumer behavior and competitive pressures. For example, could privacy concerns and waning confidence mean we have seen the peak of Facebook’s core social media offering? Both declining market value and negative sentiment surrounding the company might indicate as much. Retailing, media, and financial services are also being rapidly transformed by innovative technology. What happens when those forces take hold of the massive markets of healthcare and education?

Not all displacement comes at the hands of mismanagement. Giants of an even older era, like Standard Oil and AT&T, saw their power greatly diminished thanks to antitrust suits and forced dismantling under the eye of the federal government. While today’s legislators seem to be averse to this kind of solution, the threat does loom at least hypothetically. While much scholarly ink has been spent considering the case against the Big Five, most opinion makers seem to think such a forced breakup is incredibly unlikely.

Regardless of the reason, it’s quite likely that in 10 years — or certainly 20 — the prevailing Big 5 will include names that are not on anyone’s radar yet. Similar to Bezos’s comment, Alphabet Chairman Eric Schmidt told a crowd in 2014 of his trepidation about future competitors, saying, “Somewhere, there’s someone in a garage gunning for us.” He was sure of this fact because, as he went on to tell the crowd, he was once the one in that garage, bent on transforming the industry. But it’s almost certainly true that somewhere, someone is aiming for the top spot, and it’s only a matter of time before they get there.

There will always be ambitious business leaders and entrepreneurs seeking to change the status quo with speed and nimbleness. This will lead to innovations and challenges that incumbents can’t easily absorb, respond to, or eliminate. Sometimes these attacks will strike at the core of an existing business, and other times they will focus on an entirely new unaddressed area.

So who might we see in tomorrow’s Big Five?

A few projections

Maybe Uber, with its ever-expanding logistical sharing platform will occupy a top spot; the advent of clean energy vehicles and self-driving cars could lead to even more clever innovations by the dominant ride-sharing companies, or even allow a newer company to come forward, iterating and innovating with existing strategies in the light of advancing technology.

Maybe Alibaba‘s global expansion will secure it a spot at the top, or a company that dominates a field like blockchain, artificial intelligence, or the intersection of biology and information technology. AI is expected to have a massive, all-encompassing impact on virtually every sector, so it’s more than possible that an AI-based tech company will rise to the top (though they’ll have to directly compete with the likes of Microsoft and Google to get there).

The cutthroat nature of business and evolving consumer tastes and needs means that even the most powerful companies aren’t safe from aspiring startups addressing gigantic markets and tectonic shifts.

It can be difficult to discern which companies will take the lead and continually develop innovations that appeal to massive consumer bases. In many cases, a new product or service that seems revolutionary can be anything but.

If I were to place only one bet, it would be on a company that cracks the code on bringing healthcare to consumers in a user-friendly way. Healthcare is a massive global market whose need is not going to disappear anytime soon. It’s already one of the largest sectors in the US, representing 17% of the GDP. That number will only continue to grow as costs escalate, the population lives longer, and people have more chronic conditions than ever before.

Most of today’s Big Five have given lip service to exploring healthcare, but you’d be hard-pressed to find a scalable product or identifiable strategy at the present moment. Computing horsepower and mobile technology have transformed many aspects of our daily lives, and that impact has yet to be seen in healthcare. That means the sector remains to be fully explored, and it’s highly likely that one of the next Big Five will rise from within this industry.

Why it matters

The importance of understanding where the next most valuable companies will come from is evident when looking at the current Big Five’s influence on how business is run today. Amazon has defined retail and led the charge in e-commerce, Facebook has changed communication and even marketing, Apple led the personal computing and smartphone revolutions, and so on.

Likewise, tomorrow’s Big Five are sure to affect business and society in many ways. And those of us able to identify the signs of change — before the next Big Five become the next titans of industry — can adapt early to the potentially macro-scale shifts in the market.